InnovationAus.com - Govt’s $400m Medicare tech upgrade program back in the red

The federal government’s long-running Medicare tech upgrade project has been placed back on “red” status due to delays to a number of deliverables, with nearly $400 million already spent.

The health delivery modernisation program was launched by the former Coalition government in 2018 and involves long-running upgrades of the legacy payment systems that underpin Medicare and other health payments.

The project was languishing on “red status” for most of last year, meaning that there were “major issues” with the project and that its successful delivery would require changes to budget, schedule, scope or benefits.

This traffic light system is used within the public service and is based on key milestones, financial benefits, budget, business outcomes and risks.

By February, Services Australia officials said the project status had been upgraded to “amber/green”, meaning its successful delivery was probable.

Documents released under a Freedom of Information request reveal that the health delivery modernisation program slipped back into “red” status in March and has remained there since, due to a number of key deliverables being pushed into next financial year.

The documents obtained by InnovationAus.com also identified 10 medium risks surrounding the project and four high risks.

The red status of the health delivery modernisation program was confirmed at a Senate Estimates hearing on Monday, with Services Australia officials revealing that this was due to several updates that had been scheduled for this year being pushed back into the next financial year.

The agency officials also revealed that $389.3 million has been spent on the project across six years, with $33.2 million allocated in the 2024-25 financial year.

Under the program, a new claims tracker was meant to go live this month, but this launch has now been delayed until early August, the officials said.

A number of other projects, including user interface changes to track and manage care plan changes have also been pushed back.

The status of the digital transformation project was criticised by Shadow Minister for Government Services Paul Fletcher.

“Labor can’t spin its way out of this continuing policy flop,” Mr Fletcher told InnovationAus.

“This revelation is very concerning and continues Labor’s drift when it comes to digital transformation. It makes no sense to deprioritise this critical program, especially after a global pandemic when modernising health delivery should be at the forefront of the government’s thinking.

“The former Coalition government invested over $100 million in this vital program, which saw a substantial reduction in the aged care annual and lifetime fee caps process. It’s disappointing to see it go backwards under Labor.”

The health delivery modernisation program was launched to replace the legacy tech systems used to support payments under Medicare, the Pharmaceutical Benefits Scheme and other health-related programs.

Its deliverables so far have included a modernised Medicare compensation case management system, system enhancements to help staff to record when a person has or is currently experiencing family or domestic violence, and a new online claim form for Australians applying for a Medicare Entitlement Statement.

The program commenced in July 2018, with its second phase running from July 2020 to June 2022. It has been in phase three for nearly two years, with an aim of delivering new digital health services.

Under phase three, Medicare Entitlement Statements, Continence Aid Payments via myGov and online Medicare Enrolments have already been delivered.

But the departmental support has revealed that there is now a “high risk” that this third phase is not delivered, a very high risk that it fails to attract and retain skilled persons, and a range of other associated risks.

Author: Denham Sadler

This article appeared on InnovationAus.com on 4 June 2024